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Wood Technology v.

Equitable Banking
G.R 153867 February 17, 2005

The existence or appearance of ostensible issues in the pleadings, on the one hand, and
their sham or fictitious character, on the other, are what distinguish a proper case for summary
judgment from one for a judgment on the pleadings.
In a proper case for judgment on the pleadings, there is no ostensible issue at all because of
the failure of the defending party’s answer to raise an issue. On the other hand, in the case a of a
summary judgment, issues apparently exist (i.e. facts are asserted in the complaint regarding which
there is as yet no admission, disavowal or qualification); or specific denials or affirmative defenses
are in truth set out in the answer but the issues thus arising from the pleadings are sham,
fictitious or not genuine, as shown by affidavits, depositions, or admissions.

Facts:
A Complaint for Sum of Money was filed before the RTC by respondent Equitable Banking Corporation
against the petitioners, Wood Technology Corporation (WTC), Chi Tim Cordova, and Robert Tiong King
Young.
The complaint alleged WTC obtained a loan from the bank in the amount of US$75,000, with 8.75% interest
per annum, evidenced by a Promissory Note signed by Cordova and Young as representatives of
WTC. Cordova and Young executed a Surety Agreement binding themselves as sureties of WTC for the
loan. The bank made a final demand on April 19, 1996, for WTC to pay its obligation, but petitioners failed
to pay. Respondent prayed that petitioners be ordered to pay it $75,603.65 plus interest, penalty,
attorney’s fees and other expenses of litigation; and the cost of suit.
In their answer, Petitioners stated that WTC obtained the $75,000 loan; that Cordova and Young bound
themselves as its sureties. They claimed that only one demand letter, dated April 19, 1996, was made by
the bank. They added that the promissory note did not provide the due date for payment. Petitioners also
claimed that the loan had not yet matured as the maturity date was purposely left blank, to be agreed upon
by the parties at a later date. Since no maturity date had been fixed, the filing of the Complaint was
premature, and it failed to state a cause of action. They further claimed that the promissory note and surety
agreement were contracts of adhesion with terms on interest, penalty, charges and attorney’s fees that
were excessive, unconscionable and not reflective of the parties’ real intent. Petitioners prayed for the
reformation of the promissory note and surety agreement to make their terms and conditions fair, just and
reasonable. They also asked payment of damages by respondent.
Equitable moved for a judgment on the pleadings. The RTC rendered judgment in favour of Equitable.
Petitioners appealed, but the CA affirmed the RTC’s judgment. The appellate court noted that petitioners
admitted the material allegations of the Complaint, with their admission of the due execution of the
promissory note and surety agreement as well as of the final demand made by the respondent. The
appellate court ruled that there was no need to present evidence to prove the maturity date of the
promissory note, since it was payable on demand. In addition, the Court of Appeals held that petitioners
failed to show any ambiguity in the promissory note and surety agreement in support of their contention
that these were contracts of adhesion.

Issue:
Whether the appellate court was correct when it affirmed the RTC’s judgment on the pleadings (Yes)

Ratio:
A judgment on the pleadings is proper when an answer fails to tender an issue, or otherwise admits the
material allegations of the adverse party’s pleading. Both the RTC and CA recognize that issues were raised
by petitioners in their Answer before the trial court. We note that (1) the RTC knew that the Answer
asserted special and affirmative defenses; (2) the CA recognized that certain issues were raised, but they
were not genuine issues of fact; (3) petitioners insisted that they raised genuine issues; and (4) respondent
argued that petitioners’ defenses did not tender genuine issues. We have explained this vital distinction in
Narra Integrated Corporation v. Court of Appeals, thus,

The existence or appearance of ostensible issues in the pleadings, on the one hand, and their sham
or fictitious character, on the other, are what distinguish a proper case for summary judgment from
one for a judgment on the pleadings. In a proper case for judgment on the pleadings, there is no
ostensible issue at all because of the failure of the defending party’s answer to raise an issue. On
the other hand, in the case a of a summary judgment, issues apparently exist i.e. facts are asserted
in the complaint regarding which there is as yet no admission, disavowal or qualification; or specific
denials or affirmative defenses are in truth set out in the answer but the issues thus arising from
the pleadings are sham, fictitious or not genuine, as shown by affidavits, depositions, or admissions.

However, whether or not the issues raised by the Answer are genuine is not the crux of inquiry in a motion
for judgment on the pleadings. It is so only in a motion for summary judgment. In a case for judgment on
the pleadings, the Answer is such that no issue is raised at all. The essential question in such a case is
whether there are issues generated by the pleadings. This is the distinction between a proper case of
summary judgment, compared to a proper case for judgment on the pleadings.

Indeed, petitioners’ Answer apparently tendered issues. While it admitted that WTC obtained the loan,
that Cordova and Young signed the promissory note and that they bound themselves as sureties for the
loan, it also alleged special and affirmative defenses that the obligation had not matured and that the
promissory note and surety agreement were contracts of adhesion.

Applying the requisites of a judgment on the pleadings vis-à-vis a summary judgment, the judgment
rendered by the RTC was not a judgment on the pleadings, but a summary judgment. Although the Answer
apparently raised issues, both the RTC and the Court of Appeals after considering the parties’ pleadings,
petitioners’ admissions and the documents attached to the Complaint, found that the issues are not factual
ones requiring trial, nor were they genuine issues.

Summary judgment is a procedure aimed at weeding out sham claims or defenses at an early stage of the
litigation. The proper inquiry in this regard would be whether the affirmative defenses offered by
petitioners constitute genuine issues of fact requiring a full-blown trial.[18] In a summary judgment, the
crucial question is: are the issues raised by petitioners not genuine so as to justify a summary
judgment?[19] A “genuine issue” means an issue of fact which calls for the presentation of evidence, as
distinguished from an issue which is fictitious or contrived, an issue that does not constitute a genuine
issue for trial.[20]

We note that this is a case for a sum of money, and petitioners have admitted that they obtained the loan.
They also admitted the due execution of the loan documents and their receipt of the final demand letter
made by the respondent. These documents were all attached to the Complaint. Petitioners merely claimed
that the obligation has not matured. Notably, based on the promissory note, the RTC and the Court of
Appeals found this defense not a factual issue for trial, the loan being payable on demand. We are bound
by this factual finding. This Court is not a trier of facts.

When respondent made its demand, in our view, the obligation matured. We agree with both the trial and
the appellate courts that this matter proferred as a defense could be resolved judiciously by plain resort to
the stipulations in the promissory note which was already before the trial court. A full-blown trial to
determine the date of maturity of the loan is not necessary. Also, the act of leaving blank the maturity date
of the loan did not necessarily mean that the parties agreed to fix it later. If this was the intention of the
parties, they should have so indicated in the promissory note. They did not show such intention.

Petitioners likewise insist that their defense tendered a genuine issue when they claimed that the loan
documents constituted a contract of adhesion. Significantly, both the trial and appellate courts have
already passed upon this contention and properly ruled that it was not a factual issue for trial. We agree
with their ruling that there is no need of trial to resolve this particular line of defense. All that is needed is
a careful perusal of the loan documents. As held by the Court of Appeals, petitioners failed to show any
ambiguity in the loan documents. The rule is that, should there be ambiguities in a contract of adhesion,
such ambiguities are to be construed against the party that prepared it. However, if the stipulations are
clear and leave no doubt on the intention of the parties, the literal meaning of its stipulations must be held
controlling.[21]

In sum, we find no cause to disturb the findings of fact of the Court of Appeals, affirming those of the RTC
as to the reasonableness of the interest rate of 8.75% per annum on the loan. We also find no persuasive
reason to contradict the ruling of both courts that the loan secured by petitioner WTC, with co-petitioners
as sureties, was payable on demand. Certainly, respondent’s complaint could not be considered premature.
Nor could it be said to be without sufficient cause of action therein set forth. The judgment rendered by
the trial court is valid as a summary judgment, and its affirmance by the Court of Appeals, as herein
clarified, is in order.
HEIRS OF DR. MARIANO FAVIS SR vs. JUANA GONZALES

G.R. No. 185922 January 15, 2014

Section 1, Rule 9 provides for only four instances when the court may motu
proprio dismiss the claim, namely: (a) lack of jurisdiction over the subject matter; (b) litis
pendentia; (c) res judicata; and (d) prescription of action.

The motu proprio dismissal of a case was traditionally limited to instances when the court
clearly had no jurisdiction over the subject matter and when the plaintiff did not appear during
trial, failed to prosecute his action for an unreasonable length of time or neglected to comply
with the rules or with any order of the court. Outside of these instances, any motu
proprio dismissal would amount to a violation of the right of the plaintiff to be heard.

FACTS: Dr. Favis was married to Capitolina with whom he had seven children. When Capitolina died
in March 1994. Dr. Favis married Juana, his common-law wife with whom he has one child-Mariano,
he executed an affidavit acknowledging Mariano as one of his legitimate children. Mariano is married
to Larcelita, with whom he has four children.

Dr. Favis died intestate on July 29, 1995. On October 16, 1994, prior his death, he allegedly executed
a Deed of Donation transferring and conveying properties in favor of his grandchildren with Juana.
Claiming the said donation prejudiced their legitime, Dr. Favis children with Capitolina, petitioners
herein, filed an action for annulment of the Deed of Donation, inventory, liquidation, liquidation and
partition of property before the RTC against Juana, Sps. Mariano and Larcelita and their grandchildren
as respondents.

RTC nullified the Deed of Donation. The trial court found that Dr. Favis, at the age of 92 and plagued
with illnesses, could not have had full control of his mental capacities to execute a valid Deed of
Donation.

The Court of Appeals ordered the dismissal of the petitioners nullification case. The CA motu proprio
ordered the dismissal of the complaint for failure of petitioners to make an averment that earnest
efforts toward a compromise have been made, as mandated by Article 151 of the Family Court.

ISSUE: Whether or not the CA gravely and seriously erred in dismissing the complaint for failure to
exert earnest efforts towards a compromise.

HELD: YES. CA committed egregious error in dismissing the complaint. A failure to allege earnest
but failed efforts at a compromise in a complaint among members of the same family, is not a
jurisdictional defect but merely a defect in the statement of a cause of action.

In the case at hand, the proceedings before the trial court ran the full course. The complaint of
petitioners was answered by respondents without a prior motion to dismiss having been filed. The
decision in favor of the petitioners was appealed by respondents on the basis of the alleged error in the
ruling on the merits, no mention having been made about any defect in the statement of a cause of
action. In other words, no motion to dismiss the complaint based on the failure to comply with a condition
precedent was filed in the trial court; neither was such failure assigned as error in the appeal that
respondent brought before the Court of Appeals.

Therefore, the rule on deemed waiver of the non-jurisdictional defense or objection is wholly applicable
to respondent. If the respondents as parties-defendants could not, and did not, after filing their answer
to petitioners complaint, invoke the objection of absence of the required allegation on earnest efforts at
a compromise, the appellate court unquestionably did not have any authority or basis to motu
propio order the dismissal of petitioners complaint.

The correctness of the finding was not touched by the Court of Appeals. The respondents opted to rely
only on what the appellate court considered, erroneously though, was a procedural infirmity. The trial
court's factual finding, therefore, stands unreversed; and respondents did not provide us with any
argument to have it reversed.

The decision of the Court of Appeals is reversed and set aside and the Judgment of the Regional Trial
Court is AFFIRMED.
CHUA vs. TORRES

G.R. No. 151900 August 30, 2005

The absence of the signature in the required verification and certification against forum-shopping of a party
“misjoined” as a plaintiff is a not valid ground for the dismissal of the complaint.

FACTS:

Christine Chua filed a complaint for damages before RTC (Caloocan City) against Jorge Torres and Antonio Beltran. She
impleads her brother Jonathan Chua as a necessary co-plaintiff.

Torres was the owner of the 9th Avenue Caltex Service Center (Caltex Service Center), while Beltran was an employee of
the said establishment as the head of its Sales and Collection Division.

EVENTS BEFORE THE FILING OF CASE IN RTC:

 Jonathan Chua issued in favor of the Caltex Service Center his personal Rizal Commercial Banking Corporation
(RCBC) Check No. 0412802 in the amount of ₱9,849.20 in payment for purchases of diesel oil. However, the check
was dishonored by the drawee bank when presented for payment on the ground that the account was closed.
 Beltran then sent petitioner a demand letter informing her of the dishonor of the check and demanding the payment
thereof.
 Christine ignored the demand letter on the ground that she was not the one who issued the said check.
 Without bothering to ascertain who had actually issued the check, Beltran instituted against petitioner a criminal action
for violation of B.P. 22. Subsequently, a criminal information was filed against petitioner with the MTC (Caloocan
City).
 MTC then issued a warrant of arrest against petitioner. The police officers tasked with serving the warrant looked for
her in her residence, in the auto repair shop of her brother, and even at the Manila Central University where she was
enrolled as a medical student.
 Beltran’s purported negligence amounted to either malicious prosecution or serious defamation in prosecuting
petitioner resulting from the issuance of a check she herself did not draw, and served cause for a claim of moral
damages.

While Jonathan Chua was named as a plaintiff to the suit, it was explicitly qualified in the second paragraph of the complaint
that he was being "impleaded here-in as a necessary party-plaintiff". There was no allegation in the complaint of any damage
or injury sustained by Jonathan, and the prayer therein expressly named petitioner as the only party to whom respondents
were sought to recompense.

Neither did Jonathan Chua sign any verification or certification against forum-shopping, although petitioner did sign an
attestation, wherein she identified herself as "the principal plaintiff".

RTC:

 Dismissed the complaint (upon motion of respondents)


 Jonathan Chua had not executed a certification against forum-shopping, as required under Section 5, Rule 7 of RoC.
 Further MR by the petitioners was also denied.

The matter at bar was elevated directly to SC by way of petition for review under Rule 45.

ISSUE/S: W/N a co-plaintiff impleaded only as a necessary party, who however has no claim for
relief or is not asserting any claim for relief in the complaint, should also make a
certification against forum shopping.
RULING: NO. The absence of the signature in the required verification and certification against
forum-shopping of a party misjoined as a plaintiff is a not valid ground for the dismissal of the
complaint.

The verification requirement is separate from the certification requirement. It is noted that as a matter of practice, the
verification is usually accomplished at the same time as the certification against forum-shopping; hence the customary
nomenclature, "Verification and Certification of Non Forum-Shopping" or its variants. For this reason, it is quite possible that
the RTC meant to assail as well the failure of Jonathan Chua to verify the complaint.

The verification requirement is significant, as it is intended to secure an assurance that the allegations in the pleading are true
and correct and not the product of the imagination or a matter of speculation, and that the pleading is filed in good faith. The
absence of a proper verification is cause to treat the pleading as unsigned and dismissible.

Jonathan Chua was misjoined as a party plaintiff in this case.

The complaint shows that Jonathan claims nothing. If he alone filed the complaint, it would have been dismissed on the
ground that the complaint states no cause of action, instituted as it was by a person who was not a real party in interest.

Petitioner alleged in her complaint that Jonathan was a necessary party, but she failed to substantiate such allegation other
than by noting that he was "the one who really issued the check in controversy."

Jonathan Chua does not stand to be affected should the RTC rule either favorably or unfavorably of the complaint. This is
due to the nature of the cause of action of the complaint, which alleges an injury personal to petitioner, and the relief prayed
for, which is to be adjudicated solely to petitioner. There is no allegation in the complaint alleging any violation or omission of
any right of Jonathan, either arising from contract or from law.

A misjoined party plaintiff has no business participating in the case as a plaintiff in the first place, and it would make
little sense to require the misjoined party in complying with all the requirements expected of plaintiffs.

Section 11, Rule 3 of RoC:

Neither misjoinder nor non-joinder of parties is ground for dismissal of an action. Parties may be dropped or
added by order of the court on motion of any party or on its own initiative at any stage of the action and on such terms
as are just. Any claim against a misjoined party may be severed and proceeded with separately.

Misjoinder of parties is not fatal to the complaint. It should then follow that any act or omission committed by a misjoined party
plaintiff should not be cause for impediment to the prosecution of the case, much less for the dismissal of the suit. After all,
such party should not have been included in the first place, and no efficacy should be accorded to whatever act or omission
of the party.33 Since the misjoined party plaintiff receives no recognition from the court as either an indispensable or necessary
party-plaintiff, it then follows that whatever action or inaction the misjoined party may take on the verification or certification
against forum-shopping is inconsequential.

Hence, it should not have mattered to the RTC that Jonathan Chua had failed to sign the certification against forum-shopping,
since he was misjoined as a plaintiff in the first place. The fact that Jonathan was misjoined is clear on the face of the complaint
itself, and the error of the RTC in dismissing the complaint is not obviated by the fact that the adverse party failed to raise this
point. After all, the RTC could have motu proprio dropped Jonathan as a plaintiff, for the reasons above-stated which should
have been evident to it upon examination of the complaint.

WHEREFORE, the Petition is GRANTED. The Orders dated 3 December 2001 and 15 January 2002 of the Regional Trial
Court of Caloocan City, Branch 126, in Civil Case No. C-19863 are SET ASIDE, and the Complaint in the aforementioned
case is REINSTATED. The lower court is enjoined to hear and decide the case with deliberate dispatch. No pronouncement
as to costs.
SO ORDERED.

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